UpdateUS biodiesel may see boost through climate regs

29 January 2009 02:03[Source: ICIS news]

(Adds detail from the Environmental Defense Fund in paragraphs 12-14)

HOUSTON (ICIS news)--With President Obama’s administration signal that it may allow individual states to lower their vehicle carbon emission regulations, the spigot may open for more biodiesel in US fuel pumps, sources said on Wednesday.

?xml:namespace>California asked the US Environmental Protection Agency (EPA) this month to allow it to set its own carbon emissions standard lower than the federal level, a request the EPA denied under the Bush administration. The Obama government on Monday asked the EPA to reconsider those requests.

As many as 13 other states have signalled they would also like to set more stringent emissions standards.

Jeff Stroburg, CEO of Iowa-based biodiesel supplier Renewable Energy Group (REG), said that as California goes on emission standards, so too will a significant part of the nation. That could be good business for the biodiesel industry, he said.

“In the last year, policy makers at all levels of government around the country are developing strategies to reduce carbon emissions and reduce our dependence on foreign oil. A low carbon fuel standard is such a strategy,” Stroburg said. “REG’s intent is to produce and market biodiesel that would qualify as a low carbon fuel.”

According to a 2002 EPA report, biodiesel fuel emits less carbon monoxide, particulate matter and unburned hydrocarbons than diesel from petroleum. It releases a slightly higher amount of nitrous oxides, however.

The use of biodiesel as a cleaner fuel has met with criticism from some environmental groups who have argued that the energy required to produce biodiesel and its feedstocks is more than for mineral diesel.

But Robert McCormick, principal engineer of fuels performance at the National Renewable Energy Laboratory (NREL), said the latest research shows the opposite to be true.

“More recent life cycle analysis shows that biodiesel, especially from waste but also soybean oil, would reduce lifecycle carbon emissions by 50-75% compared with regular diesel,” he said.

What could limit the number of states offering biodiesel would be the amount of feedstock needed to produce the fuel, he said. The most the country could hope for as a whole would be B5 (5% biodiesel, 95% mineral diesel), far short of the B20 blends (20% biodiesel and 80% mineral diesel) some states have set their sights on.

“From a nationwide perspective, getting to B5 is maybe doable,” he said. “Nationwide, we probably consume 45bn gal of diesel annually on state highways. Based on feedstock sources we’ve identified as being available today, we could make 1.5-2bn gal of biodiesel.”

Derek Walker, director of the Environmental Defense Fund’s California climate initiative, said biodiesel could play a limited role under new emission standards, which would more likely focus on vehicle hardware and only touch upon fuel usage.

Instead, legislation calling for clean fuel standards, set to come before the California lawmakers in April, would have a bigger impact on the renewable fuel, he said.

“There’s a lot of flexibility built into the emissions standard. But demand for biodiesel will be most directly driven from clean fuel [regulation], rather than clean cars,” he said.